Research in Motion Cuts its Guidance

By Matt Phillips

The pride of Waterloo, Ontario is chopped its guidance after the close of trading:

RIM now expects fully diluted earnings per share for Q1 to be in the range of $1.30-$1.37, lower than the range of $1.47-$1.55 previously forecasted by RIM on March 24, 2011.

This shortfall is primarily due to shipment volumes of BlackBerry smartphones that are now expected to be at the lower end of the range of 13.5-14.5 million forecasted in March and a shift in the expected mix of devices shipped towards handsets with lower average selling prices.

Gross margin for the first quarter is expected to be similar to the 41.5% previously guided. This mix shift is also expected to result in revenue that is slightly below the range of $5.2-5.6 billion guided on March 24. Expected shipments of BlackBerry PlayBook in the quarter continue to be in line with our previous expectations and we have not experienced any significant supply disruptions in Q1 due to the impact of the Japan earthquake.

RIM expects to achieve full year fully diluted earnings per share of approximately $7.50, which reflects anticipated strong revenue growth in the third and fourth quarters of the fiscal year driven primarily by the launches of new BlackBerry smartphone products and prudent cost management.

Update:In after hours trading the stock is down about 9.7%. For the record, Wall Street analysts were expecting somewhere between $1.40-$1.56 for the current quarter, with a consensus at $1.48 a share. So the $1.30-1.37 range that RIM is now forecasting is a pretty big disappointment, and thus, the stock sell off.

Comments (5 of 9)

What % of their kookie talk is just PR, and what % do they actually believe?

6:54 pm April 28, 2011

Watt, Evs wrote :

Sorry Naz, I didn't realize you were going for humor through sarcasm. Party on dude!

6:25 pm April 28, 2011

Naz wrote :

You just have to try the Playbook!!! It's the ipad killer. When bb's come out with the new QNX platform, the iphone is toast....another great quarter by rim!!!

5:58 pm April 28, 2011

Watt, Evs wrote :

"Expected shipments of BlackBerry PlayBook in the quarter continue to be in line with our previous expectations and we have not experienced any significant supply disruptions in Q1 due to the impact of the Japan earthquake."

In other words, RIM wasn't expecting many sales either (averaging about 1 per store on opening day? the lines must have been horrible!). Also, there would have to be significant demand before supplies from Japan would even be an issue.

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